In Holmdel Builder's Association v. Holmdel Township, 121 N.J.
550 (1990), the New Jersey Supreme Court determined that mandatory
development fees are authorized by the Fair Housing Act of 1985 (the
Act), N.J.S.A. 52:27d-301 et seq., and the State Constitution, subject
to the Council on Affordable Housing's (COAH's) adoption
of rules.

Pursuant to N.J.S.A. 52:27D-329.2 and the Statewide Nonresidential
Development Fee Act (N.J.S.A. 40:55D-8.1 through 40:55D-8.7), COAH
is authorized to adopt and promulgate regulations necessary for the
establishment, implementation, review, monitoring and enforcement
of municipal affordable housing trust funds and corresponding spending
plans. Municipalities that are under the jurisdiction of the Council
or court of competent jurisdiction and have a COAH-approved spending
plan may retain fees collected from nonresidential development.

This article establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance with N.J.S.A. 52:27D-329.2 and the Statewide Nonresidential
Development Fee Act (N.J.S.A. 40:55D-8.1 through 40:55D-8.7). Fees
collected pursuant to this article shall be used for the sole purpose
of providing low- and moderate-income housing. This article shall
be interpreted within the framework of COAH's rules on development
fees, codified at N.J.A.C. 5:97-8.

A development included in the Housing Element and Fair Share
Plan, and includes, but is not limited to, an inclusionary development,
a municipal construction project or a one-hundred-percent affordable
development.

The New Jersey Council on Affordable Housing established
under the Act which has primary jurisdiction for the administration
of housing obligations in accordance with sound regional planning
consideration in the state.

The legal or beneficial owner or owners of a lot or of any
land proposed to be included in a proposed development, including
the holder of an option or contract to purchase, or other person having
an enforceable proprietary interest in such land.

The assessed value of a property divided by the current average
ratio of assessed to true value for the municipality in which the
property is situated, as determined in accordance with §§ 1,
5, and 6 of P.L. 1973, c. 123 (N.J.S.A. 54:1-35a through 54:1-35c).

Those strategies that minimize the impact of development
on the environment and enhance the health, safety and well-being of
residents by producing durable, low-maintenance, resource-efficient
housing while making optimum use of existing infrastructure and community
services.

Within the Stream Corridor Preservation Residential Zone ("SCPR"),
a density bonus is permitted for the cluster development option provided
for in this zone. Residential developers within this zone shall pay
a development fee of 6% of the equalized assessed value for each additional
unit permitted as a result of the density bonus under the cluster
development option. On the remaining units, the developer shall pay
a development fee of 1.50% of equalized assessed value. Under the
cluster development option in the SCPR Zone District, a maximum density
of 0.8 lot per gross acre is permitted as a density bonus. In noncluster
developments, the maximum density in the SCPR Zone District is 0.43
lot per gross acre. (The density bonus equals a net of 0.37 lot per
gross acre.) If a variance is granted permitting development in the
SCPR Zone District pursuant to N.J.S.A. 40:55D-70d(5) (referred to
as a "d" variance or density variance), then the developer shall be
subject to a bonus development fee of 6% of the equalized assessed
value per unit on each additional residential unit realized above
that which is permitted by right under the existing zoning. On the
remaining units, the developer shall be subject to a development fee
of 1.50% of the equalized assessed value per unit. However, if the
zoning on a site has changed during the two-year period preceding
the filing of the "d" variance application, then the base density
for the purposes of calculating the bonus development fee shall be
the highest density permitted by right during the two years preceding
the filing of the "d" variance application.

Within the R-60/15 Residential District, a density bonus is permitted
for the cluster development option provided for in this residential
district. Residential developers within this residential district
shall pay a development fee of 6% of the equalized assessed value
for each additional unit permitted as a result of the density bonus
under the cluster development option. On the remaining units, the
developer shall pay a development fee of 1.50% of the equalized assessed
value. Under the cluster development option in the R-60/15 Residential
District, a maximum density of one lot per gross acre is permitted
as a density bonus. In noncluster developments, the maximum density
in this residential district is 0.58 lot per gross acre. (The density
bonus equals a net of 0.42 lot per gross acre.) If a variance is granted
permitting development in the R-60/15 Zone District pursuant to N.J.S.A.
40:55D-70d(5) (referred to as a "d" variance or density variance),
then the developer shall be subject to a bonus development fee of
6% of the equalized assessed value per unit on each additional residential
unit realized above that which is permitted by right under the existing
zoning. On the remaining units, the developer shall be subject to
a development fee of 1.50% of the equalized assessed value per unit.
However, if the zoning on a site has changed during the two-year period
preceding the filing of the "d" variance application, then the base
density for the purposes of calculating the bonus development fee
shall be the highest density permitted by right during the two years
preceding the filing of the "d" variance application.

For residential developments in the R-40/30 Residential District which are located on properties that are not included within the consent order identified in § 220-50C of the Code of the Township of Marlboro, New Jersey, residential developers shall pay a development fee in the amount of 6% of the equalized assessed value for each additional unit permitted as a result of rezoning from the R-80 Residential District. On the remaining units, the developer shall pay a development fee of 1.50% of the equalized assessed value. Under the R-40/30 Residential District, a maximum density of 0.87 unit per acre is permitted. Under the previous R-80 Residential District, a maximum density of 0.43 unit per acre is permitted. If a variance is granted permitting development in the R-40/30 Zone District pursuant to N.J.S.A. 40:55D-70d(5) (referred to as a "d" variance or density variance), then the developer shall be subject to a bonus development fee of 6% of the equalized assessed value per unit on each additional residential unit realized above that which is permitted by right under the existing zoning. On the remaining units, the developer shall be subject to a development fee of 1.50% of the equalized assessed value per unit. However, if the zoning on a site has changed during the two-year period preceding the filing of the "d" variance application, then the base density for the purposes of calculating the bonus development fee shall be the highest density permitted by right during the two years preceding the filing of the "d" variance application.

Within all other residential districts of the Township, developers
shall pay a development fee in the amount of 6% of the equalized assessed
value for each additional unit which is realized beyond that which
would have been permitted utilizing the density provisions that were
in effect in the district in which the property was located as of
the effective date of this section (as set forth in Schedule A which
appears at the end of this chapter). This provision shall apply to
all additional units realized from whatever source (i.e., from density
bonus provisions under the cluster development option, from a rezoning
which is approved subsequent to the effective date of this section,
from a variance which is granted subsequent to the effective date
of this section, etc.). On the remaining units, the developer shall
pay a development fee of 1.50% of the equalized assessed value. If
a variance is granted permitting development in any residential district
of the Township pursuant to N.J.S.A. 40:55D-70d(5) (referred to as
a "d" variance or density variance), then the developer shall be subject
to a bonus development fee of 6% of the equalized assessed value per
unit on each additional residential unit realized above that which
is permitted by right under the existing zoning. On the remaining
units, the developer shall be subject to a development fee of 1.50%
of the equalized assessed value per unit. However, if the zoning on
a site has changed during the two-year period preceding the filing
of the "d" variance application, then the base density for the purposes
of calculating the bonus development fee shall be the highest density
permitted by right during the two years preceding the filing of the
"d" variance application.

Developments that have received preliminary or final site plan approval
prior to the adoption of a municipal development fee ordinance shall
be exempt from development fees, unless the developer seeks a substantial
change in the approval. Where a site plan approval does not apply,
a zoning and/or building permit shall be synonymous with preliminary
or final site plan approval for this purpose. The fee percentage shall
be vested on the date that the building permit is issued.

Development fees shall be imposed and collected when an existing
structure undergoes a change to a more intense use, is demolished
and replaced, or is expanded, if the expansion is not otherwise exempt
from the development fee requirement. The development fee shall be
calculated on the increase in the equalized assessed value of the
improved structure.

Within all zoning districts, nonresidential developers, except for
developers of the types of development specifically exempted by the
Non-residential Development Fee Act (N.J.S.A. 40:55D-8.1 et seq.),
shall pay a fee equal to 2.5% of the equalized assessed value of the
land and improvements, for all new nonresidential construction on
an unimproved lot or lots.

Nonresidential developers, except for developers of the types of
development specifically exempted by the Non-residential Development
Fee Act (N.J.S.A. 40:55D-8.1 et seq.), shall also pay a fee equal
to 2.5% of the increase in equalized assessed value resulting from
any additions to existing structures to be used for nonresidential
purposes.

Development fees shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of 2.5%
shall be calculated on the difference between the equalized assessed
value of the preexisting land and improvement and the equalized assessed
value of the newly improved structure, i.e., land and improvement,
at the time final certificate of occupancy is issued. If the calculation
required under this section results in a negative number, the nonresidential
development fee shall be zero.

Nonresidential developments shall be exempt from the payment of nonresidential
development fees in accordance with the exemptions required pursuant
to the Statewide Non-residential Development Fee Act, as specified
in the Form N-RDF "State of New Jersey Nonresidential Development
Certification/Exemption Form." Any exemption claimed by a developer
shall be substantiated by that developer.

A developer of a nonresidential development exempted from the nonresidential
development fee pursuant to the Statewide Non-residential Development
Fee Act shall be subject to the nonresidential development fee at
such time the basis for the exemption no longer applies, and shall
make the payment of the nonresidential development fee, in that event,
within three years after that event or after the issuance of the final
certificate of occupancy of the nonresidential development, whichever
is later.

If a property which was exempted from the collection of a nonresidential
development fee thereafter ceases to be exempt from property taxation,
the owner of the property shall remit the fees required pursuant to
this section within 45 days of the termination of the property tax
exemption. Unpaid nonresidential development fees under these circumstances
may be enforceable by the Township of Marlboro as a lien against the
real property of the owner.

For nonresidential developments only, the developer shall also be
provided with a copy of Form N-RDF "State of New Jersey Non-Residential
Development Certification/Exemption" to be completed as per the instructions
provided. The developer of a nonresidential development shall complete
Form N-RDF as per the instructions provided. The Construction Official
shall verify the information submitted by the nonresidential developer
as per the instructions provided in Form N-RDF. The Tax Assessor shall
verify exemptions and prepare estimated and final assessments as per
the instructions provided in Form N-RDF.

Within 10 business days of a request for the scheduling of a final
inspection, the Tax Assessor shall confirm or modify the previously
estimated equalized assessed value of the improvements of the development;
calculate the development fee; and thereafter notify the developer
of the amount of the fee.

Should the Township of Marlboro fail to determine or notify the developer
of the amount of the development fee within 10 business days of the
request for final inspection, the developer may estimate the amount
due and pay that estimated amount consistent with the dispute process
set forth in N.J.S.A. 40:55D-8.6(b).

Fifty percent of the development fee shall be collected at the time
of issuance of the building permit. The remaining portion shall be
collected at the issuance of the certificate of occupancy. The developer
shall be responsible for paying the difference between the fee calculated
at building permit and that determined at issuance of certificate
of occupancy.

A developer may challenge residential development fees imposed by
filing a challenge with the Monmouth County Board of Taxation. Pending
a review and determination by the Board, collected fees shall be placed
in an interest-bearing escrow account by the Township of Marlboro.
Appeals from a determination of the Board may be made to the tax court
in accordance with the provisions of the State Tax Uniform Procedure
Law, N.J.S.A. 54:48-1 et seq., within 90 days after the date of such
determination. Interest earned on amounts escrowed shall be credited
to the prevailing party.

A developer may challenge nonresidential development fees imposed
by filing a challenge with the Director of the Division of Taxation,
New Jersey Department of the Treasury. Pending a review and determination
by the Director, which shall be made within 45 days of receipt of
the challenge, collected fees shall be placed in an interest-bearing
escrow account by the Township of Marlboro. Appeals from a determination
of the Director may be made to the tax court in accordance with the
provisions of the State Tax Uniform Procedure Law, N.J.S.A. 54:48-1
et seq., within 90 days after the date of such determination. Interest
earned on amounts escrowed shall be credited to the prevailing party.

There is hereby created a separate, interest-bearing housing trust
fund to be maintained by the Chief Financial Officer of Marlboro Township
for the purpose of depositing development fees collected from residential
and nonresidential developers and proceeds from the sale of units
with extinguished controls.

Within seven days from the opening of the trust fund account, the
Township of Marlboro shall provide COAH with written authorization,
in the form of a three-party escrow agreement between Marlboro Township,
the bank holding the interest-bearing housing trust fund, and COAH,
to permit COAH to direct the disbursement of the funds as provided
for in N.J.A.C. 5:97-8.13(b).

The expenditure of all funds shall conform to a spending plan approved
by COAH. Funds deposited in the housing trust fund may be used for
any activity approved by COAH to address the Township of Marlboro's
fair share obligation and may be set up as a grant or revolving loan
program. Such activities include, but are not limited to, preservation
or purchase of housing for the purpose of maintaining or implementing
affordability controls, rehabilitation, new construction of affordable
housing units and related costs, accessory apartment, market to affordable,
or regional housing partnership programs, conversion of existing nonresidential
buildings to create new affordable units, green building strategies
designed to be cost saving and in accordance with accepted national
or state standards, purchase of land for affordable housing, improvement
of land to be used for affordable housing, extensions or improvements
of roads and infrastructure to affordable housing sites, financial
assistance designed to increase affordability, administration necessary
for implementation of the Housing Element and Fair Share Plan, or
any other activity as permitted pursuant to N.J.A.C. 5:97-8.7 through
5:97-8.9 and specified in the approved spending plan.

At least 30% of all development fees collected and interest earned
shall be used to provide affordability assistance to low- and moderate-income
households in affordable units included in the Marlboro Township Fair
Share Plan. One-third of the affordability-assistance portion of development
fees collected shall be used to provide affordability assistance to
those households earning 30% or less of median income by region.

Affordability assistance to households earning 30% or less of median
income may include buying down the cost of low- or moderate-income
units in the Marlboro Township Fair Share Plan to make them affordable
to households earning 30% or less of median income.

The Township of Marlboro may contract with a private or public entity
to administer any part of its Housing Element and Fair Share Plan,
including the requirement for affordability assistance, in accordance
with N.J.A.C. 5:96-18.

No more than 20% of all revenues collected from development fees
may be expended on administration, including, but not limited to,
salaries and benefits for municipal employees or consultant fees necessary
to develop or implement a new construction program, a Housing Element
and Fair Share Plan, and/or an affirmative marketing program. In the
case of a rehabilitation program, no more than 20% of the revenues
collected from development fees shall be expended for such administrative
expenses. Administrative funds may be used for income qualification
of households, monitoring the turnover of sale and rental units, and
compliance with COAH's monitoring requirements. Legal or other
fees related to litigation opposing affordable housing sites or objecting
to the Council's regulations and/or action are not eligible uses
of the affordable housing trust fund.

The Township of Marlboro shall complete and return to COAH all
monitoring forms included in monitoring requirements related to the
collection of development fees from residential and nonresidential
developers, payments in lieu of constructing affordable units on site,
funds from the sale of units with extinguished controls, barrier-free
escrow funds, rental income, repayments from affordable housing program
loans, and any other funds collected in connection with the Township
of Marlboro's housing program, as well as to the expenditure
of revenues and implementation of the plan certified by COAH. All
monitoring reports shall be completed on forms designed by COAH.

The ability for the Township of Marlboro to impose, collect
and expend development fees shall expire with its substantive certification
unless the Township of Marlboro has filed an adopted Housing Element
and Fair Share Plan with COAH, has petitioned for substantive certification,
and has received COAH's approval of its development fee ordinance.
If the Township of Marlboro fails to renew its ability to impose and
collect development fees prior to the expiration of substantive certification,
it may be subject to forfeiture of any or all funds remaining within
its municipal trust fund. Any funds so forfeited shall be deposited
into the New Jersey Affordable Housing Trust Fund established pursuant
to N.J.S.A. 52:27D-320. The Township of Marlboro shall not impose
a residential development fee on a development that receives preliminary
or final site plan approval after the expiration of its substantive
certification or judgment of compliance, nor shall the Township of
Marlboro retroactively impose a development fee on such a development.
The Township of Marlboro shall not expend development fees after the
expiration of its substantive certification or judgment of compliance.